Two senior GOP lawmakers outline Medicaid plan

Two high-profile Republicans have developed a Medicaid reform blueprint to give states new freedoms in the program and impose per capita caps on spending.

House Energy and Commerce Committee Chairman Fred Upton and the top Republican on the Senate Finance Committee, Sen. Orrin Hatch of Utah, released the Making Medicaid Work report Wednesday.

The 20-page plan would equip states with new authority to implement “patient-centered” reforms in Medicaid and develop block grants to impose per capita caps.

The caps — a version of which received some support from Democrats in 1995 — would be state-specific and be determined by the state’s average medical expenditures.

Upton and Hatch say the reforms, some of which are developed from ideas found in the states already, are needed to protect the program as well as state and federal budgets. They cite problems such as a lack of access to quality preventive care or physicians.

“If Medicaid is to continue fulfilling its safety net mission to the country’s most vulnerable, the program must be fixed,” the report says.

The plan would give states much more control over how to run the Medicaid program, which Republicans frequently say is controlled too much by Washington.

States would be allowed to develop new benchmark benefit design options and value-based insurance design to allow plans to offer lower out-of-pocket costs for high-value service, for instance.

States would also be encouraged to develop premium assistance models in Medicaid and craft limited benefit plans to reduce costs.

The plan would also loosen CMS control on the program. Once a state submits a request to waive certain aspects of the Medicaid rules, CMS would have 120 days to issue a final rule. And CMS would have to approve a state’s waiver if another state previously obtained a similar one — as long it wouldn’t increase federal costs.

The blueprint also taps into some of the pieces of the health reform law’s Medicaid provisions that most frustrate Republicans. The plan would repeal the law’s Maintenance of Effort provisions and some of the Medical Loss Ratio rules.

The proposal is unlikely to get enthusiastic support from Democrats, who say that states could reduce benefits if given a block grant.